I have a p/t job and my own counseling business. I have my employer take out extra for my taxes, but there is no way of predicting my counseling income since clientele is so random. I just paid the remainder that I owed. So my question is: at what point do you have to file quarterly SE taxes and how can I even estimate what that amount should be?
Hi,
Paying quarterly taxes in your case would harder to do since your income is inconsistent. To avoid possible penalties from the IRS a best practice would be to average your income over several months and pay the quarterly payment based on that amount. This will not be perfect but this will definitely lessen any penalty assessed by the IRS in the event that you underestimate a particular quarter. When you make the next quarter payment if there is a discrepancy in the amount you paid in the previous quarter you may add the difference to the next quarterly payment. By creating an account at IRS.gov you can pay that before the next quarter as well. I always advise everyone to set up an account so you can payments whenever you would like to.